- Personal Finance
How to accept credit card payments with your phone: Reviews of Square vs Intuit's GoPayment
On-line purchasing is different than face to face
Accepting payments on line is a lot easier than it was just a few years ago. Amazon payments and Paypal have really made things easy with payment integration but they have a fairly high cost. One of the reasons they charge close to 4% of the sale, is the risk factor.
On-line purchases are riskier than in person purchases because they are annonymous. Think in terms of your local dress shop. When you go into the store and make a purchase, you give them your credit card, they swipe a machine with it and then you sign a piece of paper. Theoretically they turn over your card and verify that the signatures match. The likely hood of you making a claim that you never made this purchase is far less than if you were billed for a dress that you ordered on-line with an email address. Because of the higher risk, you are charged a higher rate for the convenience of accepting credit cards.
How to Accept Credit Card Payments on your Phone
One of my sources of income is a teeth whitening service. In the past, if a client wanted to pay me by credit card, i would send them an invoice through Paypal. Now I have two new options.
Square charges 2.7% with no minimum sales per month and no monthly fee. The reason I can get this rate, is I have a free card reader mailed to me by Square. If I lose it, or want to accept a payment by phone, i can manually enter a credit card number and the rate will go up to 3.7% +13 cents.
Another option I have is Go Payment by Intuit. They have two different pricing structures depending on how much you plan to accept. The low volume plan is nearly identicle to Square at 2.7% but if you accept more than $1,000 a month, they recommend the high-value plan which will only cost you 1.7% plus a $12.95 fee. Both plans charge an extra percent when the card is swiped. Go Payment also offers you a free card reader for signing up.
Review of Square Credit Card Reader
I have used Square twice now. Once was to accept a cash payment. I didn't get charged for the payment but it calculated the tax and sent my customer a receipt.
I like the reports that it offers but I have to use two separate transactions on my Android phone to list individual items seperately. If I had an IPad I could use Square Register and move icons over without having to type any description in.
I'm not completely won over by Square and here is why. The very first time I used the card, my customer gave me their debit/credit card. Somehow, thier checking account listed my charge but also two identical pending transactions on their account. I don't know which bank it was my client used, but they insisted that I could get her money back for her right away. It was then, that I discovered Square does not have a telephone listed anywhere.
On Sunday morning I drafted a desperate email to Square explaining that my customer now had $600 unavailable in their checking account. Sunday evening I received a nice response, but this did not apease my customer. It was not until Tuesday evening that Square faxed something over to my customer's bank asking them to release the funds.
Although there was no phone number, they did have a quick response time in email. I'm not entirely convinced that this problem was Square's problem, but it would have been nice to talk to someone on the phone.
Review of Go Payment
Go payment is just as easy to use as Square, but has less choices of which types of phones you can use it with. The option to pay a monthly fee and pay less per transaction is a nice one for businesses with a lot of volume. My credit card volume is not very high because I still have a lot of cash paying customers.
Intuit offers an 800 line to ask questions but they are huge. You can literally get lost on their website with all the offerings they have for small businesses. It makes me leary. My concern is that they will do the bait and switch, luring you in with a free reader and great rates, then snapping it all away once your business has grown.
Why I'll Stay with Square
I am part of a growing trend of helping out the little guy. If Square is huge, they do a good job of hiding it. They have a timely response rate, and they are simple.
I will warn my customers not to use a debit card, and watch to see that I don't have any more issues.
Have you ever needed to take a credit card in person?